How the spirit of the Rock triumphed over the prudence of the Northern

Hindsight suggests that the Rock was always likely to get the Northern into trouble one day. The Northern Counties Permanent Building Society, founded in 1850 as the successor to the Newcastle Land Society, was by reputation ‘a serious establishment’ (one of its first decisions was to ban women from its board, a ruling observed by its successor until 1999) and its early growth was relatively slow. By the turn of the 20th century, it still had only 216 mortgage borrowers, and was one of no less than 29 building societies in a city of 270,000 people. During and after the second world war it expanded by absorbing smaller societies — the Crown, the Workington, the Elswick — but it remained firmly rooted in its home region and the high-minded principles of mutuality.

The Rock Permanent Benefit was 15 years younger than the Northern, and ‘seen as a much more light-hearted place’, according to a local historian. As home ownership grew in the 1920s, the Rock was a relatively aggressive lender, pushing out £1 million in a single year. It was also one of the first societies to expand nationally, opening branches as far apart as Penzance and Aberdeen.

When these rival institutions started to discuss merger in the late 1950s, their contrasting cultures got in the way. So did the personalities of the men in charge: Fuller Osborn for the Northern, and for the Rock the third Viscount Ridley — father of the cantankerous Tory minister Nicholas Ridley and grandfather of the present Northern Rock chairman (and former Spectator contributor) Matt Ridley. It was only after old Lord Ridley had a leg amputated and died of complications that the merger moved forward in 1965. The combined institution had two thirds of the mortgage business in the north-east and continued to grow, absorbing dozens of smaller societies over the next 20 years.